After seeing regulators go behind cryptocurrency exchange and other platforms, Decentralized Finance (DeFi) platforms like Uniswap have started taking actions to shield themselves.
Friday 23rd saw Uniswap Labs blacklist tokens from its app interface in response to its monitoring of the “evolving regulatory environment”.
This announcement was made via a blog post by the group that developed Unisawp’s interface and blog.
Uniswap Lab has decided to take action to prevent future regulators’ actions.
An announcement was made to try and minimize the controversy surrounding the decision.
Decentralization is the idea behind cryptocurrency and DeFi. It is difficult to imagine how Uniswap Labs will “continue to design products and contribute to Uniswap Protocol in a manner that is consistent with DeFi industry values.
The effect of the decision on Uniswap’s main interface is similar to blacklisting all tokens.
These tokens are more likely to be classified as securities by regulators such as the Securities and Exchange Commission. This agency has previously taken action against Ripple Labs.
Although the delisting will not affect the official Uniswap interface it was well-received by the crypto community. Many users were confused as to why the decision wasn’t made via governance votes or after consulting the community.
This news sets a precedent and will likely affect the protocol’s future. It is evident that Uniswap Labs has made clear that it is able to make important decisions without affecting the sentiment of the community.
UNI’s price saw a slight decline in the hours after the announcement. However, the governance token’s market value quickly recovered.
Hayden Adams, who is the inventor of Uniswap Protocol was quick to point out the fact that the “official” Uniswap Interface doesn’t account for enough volume. It is a good time to understand the differences between an interface, a protocol, and how decentralization works.
Concerns about the decentralization of Uniswap have been rising for months. The DeFi Education Fund recently sold $10 million of UNI.
Gabriel Shapiro (General Counselor at Delphi Labs) suggested that forking Uniswap’s interface might be a viable option, while implying, however, that such an effort would require Uniswap Labs to not file a DMCA request (Digital Millennium Copyright Act).
Although decentralization may be the ultimate goal of DeFi, it seems that no protocol has been able to achieve it beyond a technical level.
It may be true that as long as the founding teams continue to direct development efforts and regulators can place pressure on them, or certain parties have an exponentially greater impact than others, true decentralization is only a pipe dream at this point.
Gracia is graduated from a reputed university in London. She is a senior content writer at TechieGuard, where she covers media and advertising and co-hosts the Original Content podcast.